Delaware players are subject to Delaware laws and regulations, Nevadans to Nevada’s.

The agreement also creates the Multi-State Internet Gaming Association. More on that below.

The Multi State Internet Gaming Association

The Multi State Internet Gaming Association (MSIGA) is created as a result of this agreement. The MSIGA is a Delaware LLC that is basically seeking to be the hub for interstate online gambling.

The MSIGA will set minimum standards and otherwise help to guide policy development related to online gambling regulation.

Membership is open to other states. Sandoval and Markell stressed repeatedly that the MSIGA welcomes additional members and is designed to be extremely flexible to accommodate the needs of other states.

When does the DE / NV agreement kick in?

No firm date was set. Both Sandoval and Markell asserted that the agreement required no additional regulatory approval.

According to Markell, the only remaining hurdle to implementation is on the technological side.

888 – who will be a key player in this agreement as the only operator in Delaware – developed their US platform with compacting in mind.

So liquidity sharing could theoretically begin in a matter of months, a timeframe that has been echoed by a few sources on background.

Putting the compact before the horse

One potential wrinkle to the agreement that was not addressed during the meeting: What rooms are going to share liquidity?

In Delaware, 888 is the sole operator and powers all three Delaware online poker brands (which all feed into the same player pool). But 888 does not have a live room in Nevada. They have plans to launch, but no firm launch date as of yet.

888 does provide the platform for WSOP.com’s online poker room in Nevada (and in New Jersey). But in New Jersey, 888 and WSOP operate separate networks (The All American Poker Network and WSOP.com respectively) despite sharing the same software platform, an arrangement most expected to extend into Nevada.

Mitch Garber, CEO of Caesars Acquisition Company, said in an email that his company will “now take a real look at Delaware as well” following the signing of the agreement.

Garber described the agreement as “a very important milestone.”

“If you think about how quickly three states have legalized online gaming,” Garber continued, “and how quickly two states have reached a compact on sharing liquidity, this bodes well for future state legalization and future inter-state collaboration.”

Will revenues in Delaware and Nevada see a boost?

Today’s announcement of Nevada and Delaware entering into online poker agreement (i.e. compact) whereby the two states will share player liquidity (revenue will be distributed evenly based on location of player that generated rake) is symbolically important; however we expect the financial implications for both states to be negligible.

I personally think that Delaware will see substantial gains in poker as a result of this agreement, but their overall poker number is so low that even substantial gains would be negligible in an absolute sense.

What’s next for interstate online gambling compacts?

While Sandoval and Markell spoke of the benefits to their individual states, it was clear that the focus of the agreement was the expansion of MSIGA to include additional members.

Obviously New Jersey is the only other state offering online poker and casino games at this point.

When asked if he had invited New Jersey to join, Sandoval responded that he has had conversations with New Jersey and that they would love to have New Jersey on board, but did not elaborate beyond that.

How would a compact impact New Jersey’s online poker market?

If New Jersey comes on board – and that’s a big if, for a number of reasons – what would be the impact on the existing online poker market in the state?

The big winner would be WSOP.com who would immediately leapfrog Party/Borgata for the top traffic spot in New Jersey thanks to the roughly 60% bump the addition of WSOP.com’s Nevada traffic would provide.

Another winner: Ultimate Poker, who would both shore up their Nevada room and – perhaps more critically – breathe life into their New Jersey operations.

But that’s all speculation. There’s a reason why NJ was absent from the ceremony today, and a number of reasons why they may never partner up with New Jersey and Delaware, as Joe Brennan Jr. concisely noted:

NJ will see the DE/NV "hub" strategy as a challenge to their own; not likely to join anything where they're not the "big dog" & empowers NV.

Articles 7-8

MSIGA is governed by a board consisting of one representative from each member state.

That board will be chaired (and vice-chaired) by Delaware and Nevada for the first 4 years. The powers of the chair are not articulated.

That board sets the policy for MSIGA, controls membership and so on.

Members must designate a law enforcement representative for online gambling issues.

Members can’t have subordinate or side agreements with other individual members (or subsets). Basically it sounds like you can’t pool with one state on one game and not pool with other states that also offer that game.

Articles 9-13

Article 9 covers Data Protection and I’m not completely certain if there’s anything of note in there. Article 10 outlines the Dispute Resolution policy for MSIGA, which seems pretty standard. The one odd part involves what happens when there’s a player dispute involving players in two states when a licensee is licensed in both states. As I read it, it’s unclear whose rules trump whose in that case.

Article 11 (Amendments to this Agreement) reveals that amendments require 2/3rds vote, or unanimous consent if there are only two members. Article 12 (Withdrawal/Expulsion from this Agreement) details the process for being booted from MSIGA; that requires 60 day notice and a 75% vote. Article 13 (Termination of this Agreement) says that unanimous consent is required for the agreement to be terminated.

I certainly could be missing something, but the remainder of the articles appear to be largely boilerplate.

Exhibit A – Minimum Standards

This section lays out the minimum standards prospective members must meet. It’s very brief, taking up a bit under two pages. Some points of interest:

Sections 1 and 2 suggest a rather broad “bad actor” clause that could limit participation, but no specific bright lines are identified.